All Things Considered: August 2006

A New York Times story from the latest WTO meeting in Geneva puts what is going on at the trade talks in tight focus.

A New York Times story from the latest WTO meeting in Geneva puts what is going on at the trade talks in tight focus.

According to the report, Europe’s chief negotiator had a meeting with his American counterpart the day before the so-called make or break talks were to begin.

At that meeting he asked the American what the response would be if Europe offered the Americans everything they had asked for. The American was dumbfounded. She couldn’t respond. The clear impression left with those at that meeting was that even if Europe offered up everything it still wouldn’t be enough.

That little session explains a lot about the failure of the late June WTO talks. First, it indicates the hopelessness of it all. The U.S. has staked out ground it won’t stand on and Europe knows it.

Meanwhile Europe has taken a stand (not the what if we gave you everything charade) that none of the other major countries will accept.

Meanwhile, India, Brazil and a few others are seemingly playing the same game and are arguing for freer trade except in financial services and other areas they want to protect.

Canada, and this will be hard on our egos, was a nonfactor. While we focus on supply management, the Canadian Wheat Board and praise or condemn Canada’s so-called balanced position we are really only talking among ourselves.

The rest of the world has bigger issues to address and in the dying days of these trade talks Canada’s internal, ideological debates don’t merit their time nor attention.

That doesn’t mean these issues aren’t important to us – they are. But compared with the billions of dollars in trade distorting subsidies and protection in place in the U.S. and in Europe, supply management is chicken feed.

Even if Canada had offered to sacrifice supply management and the Canadian Wheat Board, the talks would have gone nowhere. The offer might not even have been noticed outside of this country.

Recognition of that puts everything about these talks in perspective.

While the June talks were a failure, they weren’t quite a disaster for the WTO. There will be more talk and more meetings. If the past is a guide to the future, it is likely that the U.S. and Europe will get together on their own and try to salvage something from the current mess.

They did that very thing at the end last WTO round and cobbled together the Blair House Accord and presented it to the rest of the world as a done deal. They may well try the same thing this time, but it could be more difficult because they will probably have to bring India and Brazil to the table.

The other thing that is different is timing. There are elections in France and the U.S. this year. No French politician or American Congressman will hit the election trail having just agreed to cut farm programs and protection by billions of dollars.

That means that any serious talks cannot begin until late November or early December. They would then be interrupted by the Christmas and New Year’s holidays and resume in early January.

At that point the deadline of all deadlines looms large. In June, the U.S. president loses his right to present the U.S. Congress with a trade deal and require them to vote yea or nay to the entire package. After that any trade deal would be presented to American legislators for line-by-line, clause-by-clause scrutiny and amendment.

No other nation will allow a trade deal to be subjected to the tender mercies, the political whims and the crass partisanship of U.S. legislators.

While Congress could provide the president with an extension of the right to present a deal for an up or down vote, that is considered unlikely. The U.S. political pot is on full boil these days and few in Washington D.C. see it as being in their own interest to give an inch to an unpopular president over what is likely to be an unpopular trade deal.

Back in Canada, little is likely to change. Those who oppose supply management will continue to oppose it. The supply managed marketing boards will no doubt continue their incredibly successful lobbying of the federal government.

The federal government will do its best to sound serious talking gravely about the implications of complete breakdown at the WTO and how Canada is trying to move the discussions forward.

The rest of us will have to sit back and watch and we should be watching the U.S. and Europe. Ottawa is barely in the game anymore if it is in it at all.

It would be comforting – from a supply managed perspective – to think that this round of the WTO will collapse. But as that great 20th century American philosopher Yogi Berra said, “It ain’t over until it’s over.” And until it’s over supply management is threatened.